Commercial awareness is incredibly important for law students, especially those who have an interview lined up for a clerkship or graduate law job. Interviewers will usually ask a question to see if you are keeping up with recent events in the business world.
While this might sound scary (I never read the business pages as a law student!), the great news is that preparing for these questions is easy – make sure you read our post here, commercial awareness for law students, for an easy five step guide to learn this skill.
The whole point of this post is to provide you with a variety of interesting and recent topics to choose from to hone your commercial awareness skills. Just like essay topics at law school, it is usually easier to pick one from a list, than have to go out and try to think of one from scratch!
I won’t take up any more of your time. Here is a list of topics which are relevant for the second half of 2015, and which should continue to be newsworthy in the future.
Commercial awareness in the supermarket industry
The “supermarket wars” are an excellent topic to start with. First of all, it is an area that has real world interest (every one has to eat!), and with Woolworths and Coles having over 70% of the market share, it is an intensely competitive industry.
This topic area looks at how different companies compete in the same market place, how an industry responds to old competitors (eg how Woolworths and Coles respond to IGA Supermarkets), and how an industry responds to new competitors (eg Aldi).
Broad areas to think about include:
- How does the public perceive the supermarkets? How does this affect their business models?
- Is one supermarket considered more expensive, and if so, what is it doing to address this (hint: Woollies is perceived as being more expensive than Coles, despite having comparable prices)
- How are the big supermarket chains responding to the low cost Aldi model?
- How has Coles benefited by having Bunnings as part of the larger corporate group?
As stated, this is a broad and interesting topic for all (and probably mandatory if you want to apply for a graduate job at the ACCC).
A US IPO for an Australian company
Atlassian is a company that was started by two University of New South Wales students in 2002. Starting their venture on a shoe string budget, they now own a company worth hundreds of millions of dollars. A great start up story!
Atlassian will shortly undertake an IPO in the US, but there is some doubt regarding whether a tech company can hit its goal of raising US$250m. I will be following this closely to see what happens in the first few months of its listed life, and what it does to maintain and grow its value. It will definitely make for an interesting story.
If this topic appeals to you, a few things to consider include:
- What did the bankers do to help Atlassian reach its target listing price?
- What are the differences between the Australian and US stock exchanges, and why did Atlassian choose to raise money in America?
- If it doesn’t reach its fundraising goals, why? Was there anything in particular that concerned institutional (or retail) investors?
- After listing, how did Atlassian address the business world? Did it come out confident, or cautious?
- What economic factors are in place to spur Atlassian to list now?
This is a great topic if you are interested in a corporate practice group (or are interviewing with a lawyer who has a corporate background).
Santos and Sceptre – commercial awareness in the resources industry
The big mining companies are important clients to top tier law firms, so you can be sure that focusing on a topic like Santos will be relevant if you are interviewing at a top tier firm.
Like all mining companies, Santos has had to cope with some of the lowest commodity prices in recent history, which has seen their share price drop from around $14 in mid 2014 to just over $4 at the end of 2015. Sceptre has taken this opportunity to lob a $7 billion all-cash bid at Santos, which equates to a per share value of $6.88. Like usual, the board swiftly labelled this as a low ball and opportunistic offer, and knocked it back. The ball is now in Sceptre’s court again.
This is a great topic if you need to brush up on your knowledge of the Australian economy, and how it is affected by international markets. Other issues to think about with this topic might be:
- What sort of strategy has Sceptre used to approach the takeover? Did it work? Was this a sensible approach?
- Why would Sceptre want to acquire the assets or business of Santos? How do the businesses align?
- What does each company do? How have they responded to low commodity prices? How would a takeover help Sceptre?
- Would Santos shareholders be better off if Santos accepts the Sceptre offer?
A commercial topic for the suburban lawyer
A topic for budding suburban and small firm lawyers is the trust fund feud between Gina Rhinehart and her children. Setting up family trusts is a key work area for suburban and other small law firms, and you can be sure that all lawyers working with trusts will be following this saga closely – if only for the gossip!
Obviously, this is also an area that would interest lawyers in larger firms working with company trusts, or lawyers from mid tier firms who work with high net worth individuals.
Remember that for the purpose of building up your commercial awareness skills, you don’t want to focus solely on the legal issues of the Rhinehart trust – you only need to know enough to understand the topic area. What you should be focusing on is the strategy used by the different parties to facilitate a settlement of the dispute.
Consider these things:
- Which side is better placed to win this dispute, and why?
- What strategies are being used by each party, and for what purpose? There are both legal strategies (arguing over the proper construction of the trust) and commercial strategies (putting financial pressure on a party, for example, by dragging out the litigation).
- What would be a reasonable way to settle this offer, instead of continuing proceedings? What is preventing settlement?
That’s it, now get to work!
So there you go, hopefully there is a topic here that sparks your interest. They should all remain relevant for some time, so read the guide to learning commercial awareness and make a start today. I plan on collating a new list of commercial awareness topics every 6 months, so check back soon, and good luck with your interviews!